In one of the most important speeches of his premiership David Cameron will today insist that he will not abandon the Coalition's deficit reduction strategy. In a speech that the BBC is comparing to Margaret Thatcher's "No Turning Back" speech he will say the following:

“We are living in perilous economic times. Turn on the TV news and you see the return of a crisis that never really went away: Greece on the brink…the survival of the Euro in question.

Faced with this, I have a clear task: to keep Britain safe. Not to take the easy course – but the right course. Not to dodge responsibility for dealing with a debt crisis but to lead our country through this to better times. My message today is that it can be done. We are well on the way in this journey. Since we took office two years ago, we have cut the last government’s deficit by more than a quarter.

Yesterday, we had encouraging news on unemployment, too. So now more than ever this is the time to stand firm. Let me be clear: we are moving in the right direction – not rushing the task, but judging it carefully. And that is why we must resist dangerous voices calling on us to retreat. Yes, we are doing everything we can to return this country to strong, stable economic growth. But no, we will not do that by returning to the something for nothing economics that got us into this mess. We cannot blow the budget on more spending and more debt. It would squander all the progress we’ve made in these last two, tough years. It would mean more austerity, for even longer. It would risk our future. It’s not an alternative policy, it’s a cop-out."

He will also repeat his warning to €urozone nations, first made at PMQs yesterday, that the single currency area must either "make up" or "break up":

“The Eurozone is at a cross-roads. It either has to make-up or it is looking at a potential break-up. Either Europe has a committed, stable, successful Eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the Eurozone. Or we are in unchartered territory which carries huge risks for everybody. As I have consistently said it is in Britain’s interest for the Eurozone to sort out its problems. But be in no doubt: whichever path is chosen, I am prepared to do whatever is necessary to protect this country and secure our economy and financial system.”

Mr Cameron will be meeting EU leaders over coming days as the G8 gathers in the USA. He will hold his first meeting with the new French President on Friday. Yesterday, in a development that will reassure international markets, the moderate Pierre Moscovici was appointed as Hollande's Finance Minister. President Hollande has already ruled out extra spending and has reaffirmed the goal of cutting the French budget deficit to 3% of GDP by 2013. Unlike Britain's Labour Party he is not a deficit denier. He is, unfortunately for French entrepreneurs, a tax hiker.